I saw this cake from the CakeLava blogsite and would like to replicate the fondant effect. Anyone have any ideas how they do it? do you think it is marbled and then indented, or do you think it is a mosiac/puzzle like effect?

I think it's even easier than that. It just looks like regular fondant covering, with a wavy line pattern drawn into the sides with some sort of imprinting tool, then it's been airbrushed with some patches coloured in in different shades (by hand?)

Or, handpainted with dusts and vodka (or other liquor)....I'm thinking that.

You can imprint that using a thin but not sharp too and just make the wavy design. I think it is easier to use an airbrush machine with the shimmery blue. You can then use dusts (or just airbrush if you prefer) for the green shades.

I have a impression mat that looks like that I bought it at a local cake shop

Molly